Jarich: Why MWC will be all about video optimization

Peter Jarich Current AnalysisIn December, a customer in the policy-management space asked to set-up a discussion around mobile video optimization. He didn't want to tell us about an upcoming product launch (they don't have one). He didn't want to talk about the competition and their strategy in the space (he was biz dev, not sales). He felt no need to talk about operator demands (he'd heard from enough customers to know that demand was out there). The goal was a simple one: understand the vendor landscape and vendor positioning in the mobile video optimization space in order to cultivate potential partnerships.

By the time the good people at FierceWireless post this, the 2011 edition of Mobile World Congress will be a little more than a week away. Mobile video optimization will be a major theme. While pundits might question need for, or the merits of, particular solutions, the sheer number of pre-show meeting requests and product pre-briefs ensures that the topic will find itself firmly in the spotlight.

While the concept is far from new, an elevated profile circa 2011 isn't difficult to understand. And it all revolves around operator worries.

Vendors tell us mobile video is skyrocketing. By now, you've doubtless seen Cisco's Visual Networking Index traffic projections. A favorite of vendors who don't want to buy numbers (or analyst shops--like Current Analysis--that don't produce their own), the mobile component generally gets updated around the Mobile World Congress timeframe with the latest update maintaining a common theme: Mobile data traffic is expected to grow exponentially over the next five years, with video as the main driver. It's easy to dismiss the video component given Cisco's well-known video bias and strategy built around the application. The routing king, however, isn't the only one telling this story. Mobile video ad network Rhythm NewMedia reported last year that 3G networks (vs. WiFi) are carrying 53 percent of mobile video traffic. More recently, mobile video optimization specialist Mobixell claimed to be optimizing one petabyte (billion megabytes) of video traffic a month while Bytemobile (based on claims of optimizing around 20 petabytes of mobile data--not just video--a day) predicted video content to account for 60 percent of mobile traffic in 2011.

Operators expect it to become worse. It's not just vendors who believe that mobile video is a critical issue to be tackled. Operators are buying video optimization solutions for a reason. In part, it's because some, like Clearwire, have already reported video being more than half their traffic. In part, it's because there's an expectation that increased smartphone adoption will only serve to drive increased video usage--clogging networks, forcing added CapEx to deal with the traffic and potentially impacting quality for everyone. To be sure, it's naïve to believe that new users will be as voracious as early adopters. It's even more naïve to believe that everyone who will consume bandwidth intensive applications are already doing so. You might claim that operators have set themselves up for this problem based on their unlimited usage data pricing plans and aggressive video marketing. You might claim that data congestion is only impacting a small set of network resources. Regardless, extrapolating today's mobile video traffic patterns forward is something that most operators aren't too excited about.

LTE is not a solution. With added bandwidth and spectral efficiency, it might seem that LTE will deliver a fat enough pipe to make any mobile video headaches go away. It won't. It's nearly axiomatic that users will rush to take advantage of any added network bandwidth. Operator policy and pricing schemes should limit this vacuum-like tendency, but it seems like operators themselves are driving video and LTE in tandem. Take Verizon Wireless' LTE promotion efforts at CES. Its demos with Alcatel-Lucent. Its demos with Ericsson. Its work with Skype. Its work with Bitbop. Its work with Sling. Its LTE-enabled Cisco Cius. In an effort to highlight the power of LTE, video was front and center. Against the backdrop of this promotion, merely hoping that added bandwidth will balance out added usage seems like a fool's game.  

Bad video quality is obvious. Burgeoning video traffic is about more than just an OpEx (backhaul) or CapEx (RAN and core) burden. It's about traffic where quality could suffer thanks to any number of factors including congestion, formatting or device capabilities. Video quality, in turn, is something of a paradox on mobile devices. On the one hand, bad quality is easy to appreciate, marked by poor picture quality, poor sound, buffering, session stalling. Yet, while landlines set the standard for voice quality, we put up with sub-par mobile voice quality for the added convenience it offers and the added features (voicemail, caller ID, etc.) that come gratis with mobile calling plans. We also put up with it because voice is a "must have" service. The standard for video quality, however, was set by television and fixed Internet services--setting the bar high. At the same time, video services aren't a necessary, meaning that people are less likely to put up with poor quality before giving up--blaming their service provider in the process.

Optimization strategies are plentiful--maybe too plentiful. If there was nothing operators could do to manage or efficiently monetize the growing magnitude of mobile video traffic, it wouldn't be an issue; it would be something they simply learned to live with. Of course, in a competitive vendor space, few problems (real or exaggerated) go long without several proposed solutions. The mobile video space is no different. Caching content closer to the user in order to cut down on transport. Transcoding to better match the size of the content to user demands or device sizes or network capabilities. Policy to bring video into bandwidth management and tariffing discussions. Pacing to avoid delivering traffic that may never get consumed. Multiply the various solutions by the various companies promising them--video specialists, optimization specialists, integrators--and the result is operator flexibility, ultimately coupled with the confusion that comes from access to a diverse set of tools rather than a single "silver bullet."

It's an ecosystem issue.  Much of the mobile video optimization being delivered today is supported from within the operator's network.  Some of the solutions pay attention to the RF link quality. Some reside on the user's device. Yet, the mobile video "problem" that operators might fret over is about much more than optimization. It is driven by silicon innovations that support robust video services. It is driven by new devices that take advantage of this silicon and couple it with operating systems, applications and screens which encourage video consumption. It is driven by the promotion of new LTE services and operator moves to push into vertical markets. 

Don't get me wrong, mobile video optimization solutions won't rival new tablet launches or OS evolutions for headline space in Barcelona.  Many operators may not even see a need--particularly if pre-occupied with LTE launches or their own app store initiatives. Yet, where it's an issue that touches the entire mobile ecosystem, the topic is ensured more than just its 15 minutes of fame at the 2011 edition of Mobile World Congress.

Peter Jarich is the Service Director leading Current Analysis telecom infrastructure practice. Follow him on Twitter: @pnjarich.